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SEC has given a last warning to the cryptocurrency space, says Preston Byrne

source-logo  ambcrypto.com 23 November 2018 03:40, UTC

Preston Byrne, an Attorney at the ASI and the Founder of Monax, spoke about whether the SEC has successfully excluded the United States from the ICO market, in an interview with CNBC Crypto Trader. He also spoke about the potential risks that can be faced by companies that registered in the US but not with SEC before conducting an ICO.

Byrne stated that the SEC has not precluded ICOs from being registered, whereas, they have just stated that ICOs have to be registered. If not this, then the ICO must be included in an exemption. This includes a private placement deal such as Simple Agreement for Future Tokens [SAFT] under regulation D. The other common exemption is regulation S wherein ICO issuers who are based abroad and have no US touch points are going through compliance to avoid having US touch points.

He went on to say:

“So your options really are: find one of those exemptions which applies and get a lawyer who will give you a very conservative opinion about that or go directly to the SEC and ensure that your token is registered and that you’re making the appropriate disclosures on a quarterly basis.”

Byrne further spoke about the current risks faced by ICOs that raised funds in 2016 and 2017, which were registered in the USA but not with the SEC. He stated that that they can face a lot of risk. The Attorney added that an entrepreneur has a few options when faced with compliance problems like meeting with the SEC and coming with a solution.

He further added:

“In the alternative there are options such as rescission, which is basically making your investors whole again winding up the whole scheme and and calling it a day you could restructure the deal and try to get it offshore. If you haven’t issued tokens yet or you could take in your heels and fight”

Byrne stated that it is not advisable for start-ups to put up a fight against the SEC. However, for companies which have made a break-through by making hundreds of millions by selling tokens, can go up against the SEC in the court, adding that it varies from company to company. He further stated:

“But for most companies the solution is really going to be to go to the SEC and what has happened here is they’ve really given a last opportunity, a last warning to the crypto space, look there’s an option to get out with some reasonable fines you know a reasonable way to compliance but you have to come to us and you have to volunteer.”

ambcrypto.com